Correlation Between United Insurance and KHD Humboldt
Can any of the company-specific risk be diversified away by investing in both United Insurance and KHD Humboldt at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United Insurance and KHD Humboldt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance Holdings and KHD Humboldt Wedag, you can compare the effects of market volatilities on United Insurance and KHD Humboldt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United Insurance with a short position of KHD Humboldt. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and KHD Humboldt.
Diversification Opportunities for United Insurance and KHD Humboldt
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and KHD is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and KHD Humboldt Wedag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHD Humboldt Wedag and United Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United Insurance Holdings are associated (or correlated) with KHD Humboldt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHD Humboldt Wedag has no effect on the direction of United Insurance i.e., United Insurance and KHD Humboldt go up and down completely randomly.
Pair Corralation between United Insurance and KHD Humboldt
Assuming the 90 days horizon United Insurance Holdings is expected to generate 0.93 times more return on investment than KHD Humboldt. However, United Insurance Holdings is 1.07 times less risky than KHD Humboldt. It trades about 0.07 of its potential returns per unit of risk. KHD Humboldt Wedag is currently generating about 0.04 per unit of risk. If you would invest 790.00 in United Insurance Holdings on September 4, 2024 and sell it today you would earn a total of 490.00 from holding United Insurance Holdings or generate 62.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. KHD Humboldt Wedag
Performance |
| Timeline |
| United Insurance Holdings |
| KHD Humboldt Wedag |
United Insurance and KHD Humboldt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and KHD Humboldt
The main advantage of trading using opposite United Insurance and KHD Humboldt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, KHD Humboldt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KHD Humboldt will offset losses from the drop in KHD Humboldt's long position.| United Insurance vs. The Progressive | United Insurance vs. The Allstate | United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings |
| KHD Humboldt vs. UPM Kymmene Oyj | KHD Humboldt vs. Stora Enso Oyj | KHD Humboldt vs. Suzano SA | KHD Humboldt vs. Nine Dragons Paper |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |